Karnataka Agricultural Implements And Allied Industrial Co-Operative Society Ltd. v. Karnataka State Financial Corporation
2021-03-08
P.N.DESAI, SREENIVAS HARISH KUMAR
body2021
DigiLaw.ai
JUDGMENT : SREENIVAS HARISH KUMAR, J. The plaintiff has assailed the judgment of the III Addl. Sr. Civil Judge, Hubballi, in O.S.No.141/2012. The subject matter of the suit is five plots in all measuring 29 guntas 9 anas out of 2 acres 1 gunta 8 anas in block no. 281/1A of Bhairidevarakoppa, Hubballi (hereafter referred to as ‘suit property’). He sought two relief’s of declarations, firstly that the auction conducted by the first defendant with respect to suit property was illegal and void, and secondly that the sale deed dated 23.08.2007 executed by the first defendant in favour of the second and third defendants was sham, nominal and null and void; and did not bind his interest. 2. The plaintiff is a co-operative society involved in manufacture and sale of agricultural implements. It was carrying on its business in the suit property. For its business activities, it availed loan of Rs. 9,00,000/-from Karnataka State Financial Corporation i.e. the first defendant on the security of the suit property, and a sum of Rs. 50,00,000/-from Karnataka Central Co-operative Bank, Hubballi (‘KCC Bank’ for short), second charge was created on the suit property for this loan. 3. As the plaintiff became a chronic defaulter, the first defendant exercised the statutory power under Section 29 of the State Financial Corporation Act (for short, the ‘Act’), took over the possession of the suit property and brought it for auction. In the first sale held in the year 2005, the suit property was auctioned for Rs. 54,00,000/-, but the purchaser defaulted to deposit the money and therefore the sale was cancelled. Again sale was held on 23.08.2007 and the defendants No.2 and 3 purchased the suit property for Rs. 30,00,101/-. 4. The plaintiff’s case is that the suit property was capable of fetching more than Rs. 1,00,00,000/-at the time when the second sell was held. In the year 2000 itself, its value was more than Rs. 80,00,000/-. Since in the first sale, the offer was for Rs. 54,00,000/-, the second sale could not have been accepted for Rs. 30,00,000/-. The amount due to the first defendant in the year 2007 was Rs. 3,30,000/-and that the Karnataka Central Co-operative Bank had in fact written a letter to the first defendant that it would clear the dues of first defendant as it has got second charge.
54,00,000/-, the second sale could not have been accepted for Rs. 30,00,000/-. The amount due to the first defendant in the year 2007 was Rs. 3,30,000/-and that the Karnataka Central Co-operative Bank had in fact written a letter to the first defendant that it would clear the dues of first defendant as it has got second charge. Complaining that the sale in favour of second and third defendant was illegal as it was intentionally sold for a less amount, the plaintiff instituted the suit for the reliefs aforementioned. 5. The first defendant, in its written statement, contended that it exercised its power under Section 29 of the Act. Admitting that the suit property was earlier auctioned for Rs. 54,00,000/-, it stated further that the purchaser failed to remit the sale price and consequently the sale was cancelled and the EMD amount of Rs. 25,000/-deposited by the purchaser was forfeited. It denied the plaint averment that the KCC Bank came forward to clear its dues. It refuted the allegations that it did not follow procedure prescribed before conducting auction, in this regard it is stated that it issued paper publications in five newspapers, the last one was published on 03.12.2006 in Kannada Daily, ‘Samyukta Karnataka’. The plaintiff was offered an option to bring a purchaser who could purchase the suit property for the best price. At that time the plaintiff did not show any interest. The plant and machinery installed in the suit property was sold for Rs. 1.65 lakhs and the sale proceeds, credited to the loan account of the plaintiff. It took over the possession of the suit property long back. There was no irregularity in conducting second sale. 6. The third defendant filed his written statement separately, supported the first defendant in entirety and further specifically contended that the suit was time barred. 7. The trial court raised seven issues, the findings of the trial court on the first three issues are relevant for discussion in this appeal. The plaintiff examined two witnesses and produced thirteen documents, Exs.P1 to P13 to establish its case. From the defendants’ side two witnesses adduced evidence, but they did not produce any document. 8. We have heard the arguments of Sri F.V.Patil, learned counsel for the appellant and Sri Sharad V.Magadum, learned counsel for respondent No.1 and Sri G.R. Gurumath, learned senior counsel for respondent No.3.
From the defendants’ side two witnesses adduced evidence, but they did not produce any document. 8. We have heard the arguments of Sri F.V.Patil, learned counsel for the appellant and Sri Sharad V.Magadum, learned counsel for respondent No.1 and Sri G.R. Gurumath, learned senior counsel for respondent No.3. We will refer to the points that they argued little later, but their arguments give rise to the following points for discussion. 1. Has the trial court correctly negatived issue Nos.1 and 2? 2. Is the conclusion of the trial court that suit is time barred correct? 3. Whether I.A.No.1/2019 filed by the appellant/plaintiff under Order VI Rule 17 of the Civil Procedure Code for amending the plaint can be granted? 4. Are there grounds to interfere with the impugned judgment? 9. Point No.1: The two issues covered under this point are: (i). Whether the plaintiff proves that the auction conducted by defendant No.1 with respect to suit schedule property is illegal, null and void? (ii). Whether the plaintiff proves that the sale deed dated 23.08.2007 by defendant No.1 in favor of defendant Nos.2 and 3 jointly is sham, nominal and same is apart from being null and void, not binding on its share? 10. The findings of the trial Court on the above two issues are that, there is no specific allegation in the plaint that the officials of the first defendant did not follow the procedure required for auctioning the suit property, that the burden is on the plaintiffs to prove that mandatory procedures were not followed and it resulted in the sale of the suit property for a lesser price. The plaintiff does not dispute that the first defendant took over possession of the suit property by exercising power under Section 29 of the Act. Though the first defendant did not produce the evidence to the effect that it had followed the procedure prescribed in the guidelines issued for holding auction, that itself cannot be a reason for holding the auction as illegal or void. It is further held that the plaintiff has failed to provide evidence to prove that the KCC Bank had come forward to clear the dues of the first defendant and requested for not conducting auction.
It is further held that the plaintiff has failed to provide evidence to prove that the KCC Bank had come forward to clear the dues of the first defendant and requested for not conducting auction. The plaintiff has not pleaded that it made attempts to pay the outstanding amount to the first defendant and even the plaint does not disclose as to what was the amount due by the plaintiff at the time when the auction was held. Rather the plaintiff admitted that the first defendant took over possession of the suit property in the year 2004 and its name was removed from the record of rights (RTC). The trial Court has taken note of the fact that according to Ex.P.6, one M.C.Patil, being the GPA holder of V.G.Angadi, wrote a letter on 06.07.2007 requesting the first defendant to give the authority to him to sell the suit property. But the said letter discloses that it was not addressed on behalf of the plaintiff. The said letter also shows that the public auction was in the final stage and that the market price fixed was Rs. 30 lakhs, but it is not stated that the amount was less than the market value and it is also not stated that the plaintiff would bring the purchasers who were willing to purchase the property for a higher price. Referring to this letter, the trial Court has expressed an opinion that it was within the knowledge of the plaintiff that the auction proceedings were at the final stage. 11. Referring to the cross examination of PW1, the trial Court has held that he knew about the auction, but did not make any attempt to stop it. It is the clear answer of PW1 that on 28.07.2007, he came to know about auction and that he did not take any action further. Though in Ex.P.9 it is stated that the value of the suit property was Rs. 80 lakhs, the evidence on record would show that the person who bid for Rs. 50,05,000/-did not come forward to purchase the property.
Though in Ex.P.9 it is stated that the value of the suit property was Rs. 80 lakhs, the evidence on record would show that the person who bid for Rs. 50,05,000/-did not come forward to purchase the property. It is further conclusion of the trial Court that during the auctions held by the financial institutions, usually the buyers would not come forward to purchase the property at the prevailing market rate and therefore only on the basis of report given by PW2 as per Ex.P.9, it is not possible to hold that the schedule property was worth more than Rs. 1 crore at the time of auction. 12. It was the argument of Sri F.V.Patil that the trial court has not properly appreciated the evidence in that, the very case of the plaintiff is that the suit property was sold at a throw away price, it is an admitted fact that in the first auction held in the year 2005, the offer was for Rs. 54 lakhs and that the property would have fetched more than Rs. 54 lakhs when it was sold again in the year 2007 if the first defendant had followed the procedure prescribed for conducting auction. Defendant Nos.2 and 3 were not the bidders, the sale deed shows that they approached the first defendant voluntarily for purchasing the suit property. This implies that auction was not held to secure the best price. Minimum price for the property was not fixed and it has been admitted by DW1. The first defendant has referred to a number of documents in the written statement, but none of them was produced. The cross-examination of DW1 very well discloses that the first defendant did not follow the procedure before selling the property to defendant Nos.2 and 3. In fact the possession of the suit property was delivered to defendant Nos.2 and 3 before the sale deed was executed in their favour. The trial court has drawn a presumption erroneously that the first defendant would have followed the procedure before holding auction. Wherever strict proof is necessary, presumption cannot be drawn. It was the duty of the first defendant to follow the guidelines for conducting auction. The plaintiff is a co-operative society in the agricultural sector and therefore the first defendant should not have hastened to sell the property to defendant Nos.2 and 3 detrimental to the interest of the plaintiff.
Wherever strict proof is necessary, presumption cannot be drawn. It was the duty of the first defendant to follow the guidelines for conducting auction. The plaintiff is a co-operative society in the agricultural sector and therefore the first defendant should not have hastened to sell the property to defendant Nos.2 and 3 detrimental to the interest of the plaintiff. Besides placing reliance on the judgment of the Supreme Court in the case of Ram Kishun and others V/s State of U.P., AIR 2012 SC 2288 for garnering support for his argument that the sale in favour of defendant Nos.2 and 3 was bad and illegal, he quoted the words of Mahatma Gandhiji extracted in the judgment of Maheshchandra V/s Regional Manager, U.P. Financial Corporation and others ( AIR 1993 SC 935 ). 13. Sri Sharad V.Magadum appearing for the first defendant argued that the first defendant followed all the procedure before conducting auction. The documents produced by the plaintiff show that notice was given to the plaintiff about holding auction and requesting him to bring a purchaser who could buy the suit property for the highest price. He did not bring anybody. The plaintiff was aware that the suit property was going to be sold for Rs. 30 lakhs and its representative addressed a letter as per Ex.P6 stating that the sale of the suit property for Rs. 30 lakhs in the auction was at the final stage and that the plaintiff was ready to repay the dues in one single installment and that he also sought permission for releasing the suit property for being sold by it so that the property would fetch maximum price. This document indicates that the plaintiff was aware that the property would be sold for Rs. 30 lakhs, the plaintiff cannot now say that no procedure was followed. As stated in Ex.P6, the plaintiff did not bring any purchaser and therefore the property had to be sold. It is not the case of the plaintiff that the guidelines were not followed, it only says that sale consideration of Rs. 30 lakhs is less. The trial court has rightly rejected the plaintiff’s pleas. 14. Sri F.V. Patil quoted Mahatma Gandhi’s words perhaps for sustainment of agricultural related industries, as is in the case before us.
It is not the case of the plaintiff that the guidelines were not followed, it only says that sale consideration of Rs. 30 lakhs is less. The trial court has rightly rejected the plaintiff’s pleas. 14. Sri F.V. Patil quoted Mahatma Gandhi’s words perhaps for sustainment of agricultural related industries, as is in the case before us. But it is not the case of the plaintiff that the first defendant initiated action under Section 29 of the Act without following the procedure, the grievance of the plaintiff is about action aftermath of taking the possession under Section 29 of the Act. The defendant runs its business on public money, and it has to take action to realize the advances made by it. In the case of Ram Kishun (supra), the Supreme Court, in a realizing the loan amount, has observed: 10. In case the property is disposed of by private treaty without adopting any other mode provided under the statutory rules etc., there may be a possibility of collusion/ fraud and even when public auction is held, the possibility of collusion among the bidders cannot be ruled out. In the State of Orissa and Ors., AIR 1972 SC 1816 , this Court held that a highest bidder in public auction cannot have a right to get the property or any privilege, unless the authority confirms the auction sale, being fully satisfied that the property has fetched the appropriate price and there has been no collusion between the bidders. 19. Thus, in view of the above, it is evident that law requires a proper valuation report, its acceptance by the authority concerned by application of mind and then fixing the reserve price accordingly and acceptance of the auction bid taking into consideration that there was no possibility of collusion of the bidders. The authority is also duty bound to decide as to whether sale of part of the property would meet the outstanding demand. Valuation is a question of fact and valuation of the property is required to be determined fairly and reasonably.” 15. There cannot be any disagreement with the principle that whenever a property is brought to sale for recovering the outstanding dues, the interest of the borrower must be protected, any property cannot be sold for any sum thereby affecting the borrower’s interest.
There cannot be any disagreement with the principle that whenever a property is brought to sale for recovering the outstanding dues, the interest of the borrower must be protected, any property cannot be sold for any sum thereby affecting the borrower’s interest. What we find in this case is that the plaintiff can not grieve for the suit property being sold for Rs. 30,00,101/-. Indeed, the suit property would have fetched Rs. 54 lakhs had the first sale fructified, but owing to the buyer’s default, second sale had to be held. Though Sri F.V.Patil argued that there was collusion and fraud in the second sale, this argument cannot be accepted, for the plaintiff has not pleaded about fraud or collusion. What is pleaded is that the value of the property increases due to passage of time and Rs. 30,00,101/-was less than the valuation fixed by the government. It is also stated that reserve price was not fixed by the first defendant and therefore sale was immoral. 16. It is true, as has been observed by the trial Court, the first defendant failed to produce any document pertaining to sale. The defendant’s failure cannot be a sole reason to lean towards plaintiff. Given a look at the documents produced by the plaintiff, it is possible to infer that the plaintiff had been notified that the suit property would be sold for Rs. 30,00,101/-. Ex.P.6 is a letter written by power of attorney holder of Sri V.G. Angadi, who represented the plaintiff. Though Sri Gurumath argued about evidentiary value of this letter as Sri V.G.Angadi being the representative of the plaintiff could not have delegated his authority to his power of attorney holder, it may be stated that Ex.P.6 binds the plaintiff, because it was produced by PW1, i.e., V.G. Angadi. This document indicates that it was within the knowledge of the plaintiff that suit property would be sold for Rs. 30 lakhs and the sale process was in the final stage. It is written there that the KCC Bank has second charge over the suit property and somebody had contacted the KCC Bank with an offer to buy it for Rs. 60 lakhs, but the KCC Bank was delaying the matter. It is also stated that if suit property would be sold for Rs.
It is written there that the KCC Bank has second charge over the suit property and somebody had contacted the KCC Bank with an offer to buy it for Rs. 60 lakhs, but the KCC Bank was delaying the matter. It is also stated that if suit property would be sold for Rs. 30 lakhs, its interest would be affected and therefore the plaintiff requested for permitting it to sell the property for a better price. Ex.P.6 bears the date 06.07.2007 and sale in favour of the defendants No.2 and 3 was made on 23.08.2007. There is nothing on record indicating that the plaintiff did make any effort to bring a buyer who could pay higher amount than Rs. 30,00,101/-. Ex.P.7, the letter dated 15.12.2005 was written by the Assistant General Manager of the first defendant to PW1 to bring to his notice that Rs. 3.73 lakhs was the outstanding amount and he could avail ‘one time settlement’ scheme for clearing the dues. Ex.P.8 is another letter dated 31.03.2006 from the first defendant to PW1, it shows that there was an offer from a buyer for Rs. 54,05,000/-and in case PW1 could bring a better offer within ten days, or otherwise the suit property would be sold for Rs. 54,05,000/-Ex.P.7 and Ex.P.8 though relate to the date prior to first sale, they are relevant to infer that the first defendant had in fact brought to the notice of the plaintiff about the intended sale. 17. PW1 in the cross examination, has clearly stated that whatever the action that the first defendant had taken was in accordance with law. He might have denied a suggestion that he was put on notice before taking action according to law, but Exs.P.6, P.7 and P.8 falsify his stand. He has admitted that after receiving auction notice, he did not make any payment to stop the auction. He has stated that he very much knew that auction would be held, and that he came to know the name of the purchaser in the year 2007 itself. PW2 is examined to establish that the fair market value of the property was on higher side. He is a Government Approved Valuer. His oral evidence is that he had inspected the suit property in the year 2000 for the purpose of valuing it. Ex.P.9 is his report in which, he has given the fair market value as Rs.
PW2 is examined to establish that the fair market value of the property was on higher side. He is a Government Approved Valuer. His oral evidence is that he had inspected the suit property in the year 2000 for the purpose of valuing it. Ex.P.9 is his report in which, he has given the fair market value as Rs. 60,75,720/-In the same report, he has mentioned that if a bank would sell the property, it may fetch Rs. 45 lakhs (forced sale value). For two reasons the evidence of PW2 cannot be considered, firstly that Ex.P.9 was prepared in the year 2000; and secondly and more importantly, as admitted by him in the cross examination, he did not verify the market value of the contiguous properties and that he did not ascertain the valuation from the Sub Registrar’s office. 18. DW1 was the manager of the first defendant, but he was not the manager when loan was sanctioned to the plaintiff and sale proceedings were initiated. He appears to have deposed on the basis of the documents available in the office. Sri F.V. Patil argued that DW1 has admitted that the minimum sale price had not been fixed and that the procedures to be followed before conducting auction had not been followed. But, perusal of the cross examination of DW1 shows that he has not given such admissions, and to many questions he has taken ignorance of the facts, and denied the suggestion that the procedure was not followed at the time of conducting auction. DW2 is the third defendant and purchaser of the suit property. He asserts to have purchased the property for Rs. 30 lakhs as he could afford that much of amount. The evidence of DW2 is not so helpful although he has answered in the cross examination that he did not verify the documents of the suit property before participating in the auction. 19. Now collating the documentary and oral evidence, it transpires that the plaintiff was very much aware that the suit property would be going to be sold for Rs. 30,00,101/-when the sale was held for the second time. It is not in dispute that the purchaser of the first sale had offered Rs. 54 lakhs, but the sale did not fructify because of purchaser’s default. Because the property was sold for Rs. 30,00,101/-during the second sale, the plaintiff has raised his grouse.
30,00,101/-when the sale was held for the second time. It is not in dispute that the purchaser of the first sale had offered Rs. 54 lakhs, but the sale did not fructify because of purchaser’s default. Because the property was sold for Rs. 30,00,101/-during the second sale, the plaintiff has raised his grouse. He does not allege fraud or collusion in the second sale, all that he says that it was sold for a price less than the actual market value, therefore the sale is bad. Though this is a fact, the plaintiff has stated in paragraph 11 of the plaint that on 17.07.2007, he objected the sale contending that the amount due by him was only Rs. 3,30,000/-and that the KCC Bank which had advanced Rs. 50 lakhs, was ready to purchase the suit property for a higher price. The plaintiff has not produced copy of this letter. If really there was an offer from KCC Bank, nothing prevented the plaintiff from providing proof in that regard. Therefore the averments in the plaint cannot be believed to be true. 20. The second sale was held on 23.08.2007. He initiated the suit in the year 2012. Therefore, for about five years, he did not question the sale. Defendants No.2 and 3 took over the possession pursuant to the sale deed executed in their favour. The circumstances show that the plaintiffs acquiesced the sale in favour of defendants No.2 and 3. Merely for the reason that the sale was for a lesser price, it cannot be said in the circumstances of this case that the sale was illegal, null and void and sham. It is pertinent to mention here that it is not clearly possible to expect a good price for the property when distress sale takes place. For these reasons we hold that the trial court has correctly answered issues No.1 and 2 in negative. 21. Points No.2 and 3: These two points can be discussed together, the reason is that when the plaintiff initiated the suit, he did not seek the relief of possession. He just sought two declaratory reliefs, now he has come up with an application for amending the plaint seeking the relief of possession of the suit property. 22. The trial court’s finding is that the suit is time barred.
He just sought two declaratory reliefs, now he has come up with an application for amending the plaint seeking the relief of possession of the suit property. 22. The trial court’s finding is that the suit is time barred. On issue No.3 pertaining to limitation, the trial Court has held that the sale deed was executed by the first defendant in favour of defendants No.2 and 3 on 23.08.2007. In the plaint itself it is stated that the cause of action arose on 23.08.2007. PW1 in the cross examination answered that he was aware of the auction. Therefore, Article 58 of the Limitation Act would come into picture and the suit should have been filed within three years from 23.08.2007, instead the suit was filed in the year 2012. 23. Sri F.V. Patil argued that the plaintiff has now made an application under Order VI Rule 17 of CPC for amending the plaint in order to claim the relief of possession. The plaintiff could not seek the relief of possession as in the plaint it has been averred that the plaintiff had the possession of the suit property on the day when suit was filed. Now that the trial Court’s finding is that the plaintiff was not in possession, it necessitated for seeking an amendment. If the application is allowed, the amendment would go back to the date of suit and in this view Article 61(b) of the Limitation Act would be applicable and not Article 58. It was his further argument that amendment can be sought at any stage. The first appeal being continuation of the suit, this Court can grant amendment. In support of his argument he placed reliance on the judgment of the Supreme Court in the case of Mahila Ramkali Devi and others Vs. Nandram (dead) through legal representatives and others (2015) 13 SCC 132 . 24. Sri Sharad Magadum and Sri Gurumath argued that the application for amendment cannot be allowed. When the suit was filed, it was within the knowledge of the plaintiff that it was not in possession of the suit property. In fact, the plaintiff has clearly stated in the plaint that possession was taken in the year 2004. Even in the cross examination, PW1 has admitted that the KSFC took over possession pursuant to action taken u/s 29 of the Act.
In fact, the plaintiff has clearly stated in the plaint that possession was taken in the year 2004. Even in the cross examination, PW1 has admitted that the KSFC took over possession pursuant to action taken u/s 29 of the Act. Instead of seeking possession, the plaintiff confined the relief to declarations. Article 58 comes into picture for the relief’s originally claimed by the plaintiff. Article 61(b) is not at all applicable. The very purpose of filing an application for amendment is to save the limitation. A right which has accrued to the defendants by lapse of time cannot be defeated by allowing the plaint to be amended. Sri Gurumath also argued that since the plaintiff omitted to claim the relief of possession, a mere suit for declaration is not maintainable, he referred to Sec. 34 of the Specific Relief Act. 25. We do not think that the learned trial judge has given a wrong finding on the question of limitation. The plaintiff has just sought two declaratory reliefs with respect to the auction and the sale deed dated 23.08.2007. In paragraph No.10 of the plaint, it is clearly stated that the first defendant took over the possession of the suit property in the year 2004 itself. PW1 has stated so in his affidavit filed in lieu of examination in chief. The plaintiff might have stated in paragraph No.13 that inspite of the execution of the sale deed, it continued to be in possession and enjoyment of the property. This is contrary to its former plea, for the averment made in paragraph No.10 and the evidence on record clearly disclose that the plaintiff was not in possession of the suit property when it brought the suit. For this reason the plaintiff should have sought the relief of possession along with the declaratory relief. Actually the effective consequential relief was to seek possession. This being not done, if declaratory reliefs alone are considered, the appropriate Article of the Limitation Act applicable is 58, not 61(b). 26. Article 61(b) is applicable in a situation where the mortgagor brings a suit for possession of the mortgaged immovable property if the mortgagee transfers the mortgaged property for valuable consideration. Limitation prescribed is 12 years from the date when the transfer becomes known to the plaintiff.
26. Article 61(b) is applicable in a situation where the mortgagor brings a suit for possession of the mortgaged immovable property if the mortgagee transfers the mortgaged property for valuable consideration. Limitation prescribed is 12 years from the date when the transfer becomes known to the plaintiff. What this Article contemplates is that the mortgagee should have sold the immovable property to a third party for valuable consideration exceeding his limit. In other words, in case where possession of immovable property is delivered to the mortgagee reserving the right of redemption, if the mortgagee, before the expiry of the redemption period, sells the property for a valuable consideration, the possession of the property with the transferee becomes unlawful and thereby the mortgagor gets a right to recover possession. But the case on hand is though of a mortgage between the plaintiff and the first defendant, the position is slightly different, the first defendant being a statutory authority can initiate action u/s 29 of the Act and take over possession. So long as the action u/s 29 is not taken, the possession remains with the mortgagor and once the action is taken, according to sub section (2) of Sec. 29, the transfer made according to sub section (1) shall vest in the transferee all rights over the property as if the transfer had been made by the owner of the property. That means, the first defendant is deemed to be the owner. Secondly, when a statute confers a right on a financial corporation to proceed in respect of the property for recovering the outstanding dues, any action taken cannot be brought within the ambit of the transfer as envisaged in Article 61(b) of the Limitation Act as it is a transfer in invitum or by operation of law. 27. The plaintiff has sought amendment of plaint. Sri F.V. Patil placed reliance on the judgment of the Supreme Court in the case of Mahila Ramkali Devi and others (supra) and argued that in the light of the law laid down in this ruling, there is no impediment for granting amendment. In this reported case amendment was allowed after 40 years.
The plaintiff has sought amendment of plaint. Sri F.V. Patil placed reliance on the judgment of the Supreme Court in the case of Mahila Ramkali Devi and others (supra) and argued that in the light of the law laid down in this ruling, there is no impediment for granting amendment. In this reported case amendment was allowed after 40 years. On the other hand, Sri Gurumath, referred to two other judgments of the Supreme Court in the case of Ajendraprasadji N. Pandey and another (2006) 12 SCC 1 and Revajeetu Builders and Developers (2009) 10 SCC 84 , to argue that though the Court has got wide discretionary power to grant amendment, the same cannot be permitted if the amendment prejudices the right of the other party. 28. In Revajeethu Builders (supra), the Supreme Court has stated that certain factors are to be taken into consideration while dealing with applications for amendments. In paragraph No.63 it is held as under: “Factors to be taken into consideration while dealing with application for amendments. 63. On critically analyzing both the English and Indian cases, some basic principles emerge which ought to be taken into consideration while allowing or rejecting the application for amendment. (1) whether the amendment sought is imperative for proper and effective adjudication of the case; (2) whether the application for amendment is bona fide or mala fide; (3) the amendment should not cause such prejudice to the other side which cannot be compensated adequately in terms of money; (4) refusing amendment would in fact lead to injustice or lead to multiple litigation; (5) whether the proposed amendment constitutionally or fundamentally changes the nature and character of the case; and (6) as a general rule, the court should decline amendments if a fresh suit on the amended claims would be barred by limitation on the date of application. (emphasis supplied) These are some of the important factors which may be kept in mind while dealing with application filed under Order 6 Rule 17. These are only illustrative and not exhaustive.” 29. If the plaintiff were to file a suit for possession now, it having lost its possession in the year 2004 itself, cannot bring a suit within the realm of either Article 64 or 65 of the Limitation Act. Even if the suit is filed, it will be clearly time barred.
These are only illustrative and not exhaustive.” 29. If the plaintiff were to file a suit for possession now, it having lost its possession in the year 2004 itself, cannot bring a suit within the realm of either Article 64 or 65 of the Limitation Act. Even if the suit is filed, it will be clearly time barred. Therefore, a right, which has accrued to defendants No.2 and 3, who are purchasers from defendant No.1, cannot be defeated by permitting amendment. Added to this, the proviso to Order VI Rule 17 CPC clearly states that application for amendment shall not be allowed after the trial has commenced unless the Court comes to the conclusion that inspite of due diligence the party could not have raised the matter before the commencement of trial. The present suit was filed after amendment was brought to CPC in the year 2002. Therefore, the application made by the plaintiff at the stage of appeal must be examined in the light of the proviso to Order VI rule 17 CPC. As stated above, the plaintiff has clearly stated in the plaint that it lost possession in the year 2004. The application does not indicate any reason as to why it did not seek the relief of possession when it filed the suit in the year 2012. The Supreme Court in the case of Ajendraprasadji N. Pandey (supra) has held that the provisions of Order VI Rule 17 CPC have been substantially amended by the CPC (Amendment) Act, 2002, application for amendment shall not be allowed after the trial has commenced unless a party seeking amendment could satisfy the Court that he could not raise the matter before inspite of due diligence. Noticing as to how the suit proceeded on various dates, the Supreme Court held that the appellant therein lacked bonafides to seek amendment of the written statement. Here in this case also we find the same position. Application for amendment cannot be granted. The suit for mere declaratory reliefs is governed by Article 58 of the Limitation Act and the suit having not been filed within three years from the date of first accrual of right to sue, the suit is time barred. We do not find any error in the finding of the trial Court. 30.
Application for amendment cannot be granted. The suit for mere declaratory reliefs is governed by Article 58 of the Limitation Act and the suit having not been filed within three years from the date of first accrual of right to sue, the suit is time barred. We do not find any error in the finding of the trial Court. 30. Point No.4: From the foregoing discussion, we come to the conclusion that the judgment of the trial Court need not be interfered with. The appeal deserves to be dismissed with costs. Ordered accordingly.